Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 231.37

+3.3%

2:42 PM EST

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To: Sam Citron who wrote (43249)	3/6/2001 9:13:50 PM
From: Ian@SI	Read Replies (1) of 70976

Ian thinks it is foolish that I would not simply buy AMAT at $50 and hold it until it hits $150. I think he is the optimist. Not quite Sam. You asked for a better alternative to offering almost 2 year's insurance on $12000 for a premium of only $2700. I suggested 2 alternatives. 1. Just buy the shares and sell them once you had a profit which was about 40 times greater than the $2700; something which I think is quite realistic within the life of those contracts. 2. Write much shorter term options more frequently, taking somewhere between 4 and 10 times as much premium during the contract life for the leaps you suggested: More risky, but quite possible. And no, I wouldn't write those contracts today when AMAT is much closer to the top of its recent range than the bottom. Ian.

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